DebtSlaveNoMore's Journal

Where are you and where are you going?
noskich
Posts: 91
Joined: Mon Oct 31, 2011 9:34 am

Post by noskich »

I would be very interested to hear what is your average return on the financial investments? 2-3K per month sounds amazing, with a 4% ROI that would require 600K invested!

Also, what kind of software are you selling, is it only one application or multiple?

Definitely amazing turnover and great position you are in right now. I could live just off the ROI you get on financial investments including partner and child.


DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Post by DebtSlaveNoMore »

@Noskich

Well that 2-3K number can be broken down into the following:
About 1K comes from my monthly 401K contribution and Company Match. So if I stopped working my day job, that would go away.
A good chunk of investment income comes from dividends and appreciation on my mutual funds and ETFs. The YTD average ROI for these is around 14%(appreciation+dividends).
Finally, a small but significant portion of the income is from Peer-to-Peer micro lending(via Lending Club and Prosper). The YTD ROI is around 8% for me.
For the side business, I'm currently selling a large number of smartphone apps and reusable software frameworks. I also own 3 websites that are monetized via adsense, affiliate traffic, and direct e-commerce purchases.


secretwealth
Posts: 1948
Joined: Mon Jun 27, 2011 3:31 am

Post by secretwealth »

I really like how your income streams are nicely diversified, which theoretically should shield you from risk. OTOH expenses are massive, especially childcare--any way to get that down?


secretwealth
Posts: 1948
Joined: Mon Jun 27, 2011 3:31 am

Post by secretwealth »

I really like how your income streams are nicely diversified, which theoretically should shield you from risk. OTOH expenses are massive, especially childcare--any way to get that down?


Scott 2
Posts: 2824
Joined: Sun Feb 12, 2012 10:34 pm

Post by Scott 2 »

Congrats on getting the money situation worked out with your wife. My wife and I have had separate accounts since day 1, with each paying according to their ability.
It makes life so much easier. The only money fights we have, occur when household expenses go up or she gets a raise, and it's time for her to contribute more per month.
Someone I know who is insulin resistant, but not diabetic, has stopped taking metformin, by following the nutrition guidelines outlined here:
http://www.amazon.com/Insulin-Resistanc ... 0071499849
The book boils down to balancing carbs with protein at each meal, using the forumla:
(Carbs - Fiber) / 2 <= Protein
As long as they eat regularly and respect that formula, they're good after a meal. Big swings in mood and energy levels result when they ignore it.


DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Post by DebtSlaveNoMore »

@ Secretwealth
It's already in the works. In the next couple of weeks the plan is to mothball one of our two cars. In the next 2 months, we are going to put our son into a regular daycare rather than keeping the full time nanny. These two steps alone will substantially cut down on monthly expenses.
Over the next 1-2 years, we are going to purchase a house with no mortgage. This would effectively eliminate the rent as an expense. Hopefully, we can pull this off.


secretwealth
Posts: 1948
Joined: Mon Jun 27, 2011 3:31 am

Post by secretwealth »

@DSNM: Sounds like you'd be FI or pretty close with those moves. I look forward to seeing how things go!


DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Post by DebtSlaveNoMore »

@Scott 2
Yeah, I'm trying the pre-diabetic new diet. It's very high in fruits and vegetables but low in saturated fats and carbs. So far the results have been very good. :D


DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Post by DebtSlaveNoMore »

May has come and gone. Here are my numbers for May:
Income: $16,218.31


Expenses: $4,910.92


Monthly Savings Rate: 70.0%

YTD Savings Rate: 53.4%

Months Living Expenses: 99
The Good:
I have successfully mothballed one of our 2 cars. This should save us approximately $200/month in terms of insurance, maintenance, and gas.
The pre-diabetic diet/exercise regime is working out well for me, I have lost approximately 18 lbs in the last 2 months. I'm feeling much better too. The only drawback is that I'm now eating mostly veggies and walking 3 miles every day.
Financial Investments went gangbusters in May for some reason, so money seems to be rushing into my coffers from all corners. I know that this kind of valuation growth cannot last forever.
After much discussion with my wife, we decided to not move to the country side for at least another 5 years. City living has it's drawbacks but we would get to FI much faster if we continued living in our current abode. Because of this decision, I will be investing over 80K of cash(our house fund) into various financial investments over the next several months.
Starting in June, we are putting our toddler son into normal Day care instead of keeping him with a dedicated nanny. If this transition is successful, expenses should be lowered by an additional $500/month.
The Bad:
A water pipe bursted in the basement of my rental house. The tenant was able to contain the leak with the aid of some buckets. But since I was visiting family in Connecticut and could not drive there to fix it myself, I had to call a plumber on Sunday and pay the guy $200 to fix something that I could have done myself for $50 in material costs.
Additionally, I launched my new software product in May. After an initial flurry of sales during the first week, purchases have slowed down a lot. This is really disappointing because the summer is the traditional slow period of this business, and I was really counting on this product to pick up the slack. Assuming that this product doesn't sell well, it means that my software business income is going to be significantly lower in the next 3 months. :(
Things are very difficult at the day job. The workload is super demanding, and my boss is giving me grief on a daily basis. I suspect that he might be envious of the fact that I have a wife and son while he's in his mid 40s without a family.
The Ugly:
One of my wife's closest friends just left her husband of 9 years. She told my wife that she was entirely dis-satisfied with the "impoverished" life that he(an auto-mechanic) provided for her and their son and thought she could do better. So now this woman is living in a tiny studio apartment in Staten island with her 5 year old son.
Now my wife has been spending large amounts of money on luxury goods these past couple of months. The bulk of the purchases are on designer clothes, handbags, shoes, and a high-end "jumbo" stroller for our son costing over $1000 dollars. She has also donated around $600 to charities in the last month(which I think is great). But she was super public about it, to the point of bragging(which I do not approve of). Now one of my wife's friends have stopped talking to her, and another one has just left her husband. I have this sinking feeling that my DW's consumerism is playing a part in this. But it's her money to spend, and I need to respect that.


DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Post by DebtSlaveNoMore »

@Bigato, it is a framework to help other mobile developers get more feedback information from the buyers of their apps.


DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Numbers for June

Post by DebtSlaveNoMore »

I've been on vacation down south for the last week, and thus have been a bit tardy with my journal entry. So without further adieu, here are the numbers for June:

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Monthly Savings Rate: 66.6%

YTD Savings Rate: 55.6%

Months Living Expenses: 115


The Good:

This pre-diabetic diet is really beginning to take effect. I've lost 25 pounds since beginning this regime and my energy levels are way up! For some reason, a largely vegetarian diet seems to make me calmer. This is having a positive impact on our budget because I'm buying way less red meat and relying on the backyard vegetable garden as a major source of food.

June was a really efficient month, nearly 77% of household expenses were taken up by rent and childcare. For everything else during this month, my family of three spent only $1011. While I know it's still a very lavish budget in the grand scheme of things, it's a new record for my household :)

I'm noticing something very interesting here. Even a small decrease in monthly expenses can dramatically increase the number of months expenses that I've saved up. So I really need to get cracking in finding ways to reduce monthly costs.

The Bad:

Small business revenue has totally flat-lined in June. Right now we are in the worst time of the year for software/app sales, so I don't anticipate earnings to pick up significantly until about October. With that said however, I am working on a new app that will hopefully launch within the next 2 weeks.

During this month, my son was enrolled into a regular (and much cheaper) day care. Unfortunately he was kicked out after just 3 weeks due to him pushing and biting other children. I have no idea why my 2 year old is acting out, internet searches indicates that it's either a phase or some expression of frustration on his part. In any case, he is back with the nanny at a staggering cost of $1600 a month. Child care has emerged as the single largest expense on our budget, and there is little that I can do to lower this cost.

Our financial investments took a beating in June. The markets dropped a lot and I only "earned" money in this sector because of several dividend payouts and the regular 401K contribution.



The Ugly:

My day job lost a big project, so several more people were suddenly laid off. I survived again, but at this point, I'm saying a small prayer for every paycheck that I get from them.

My wife's parents have an old roof that needs to be replaced, this is going to cost around $12,000. They of course have no savings to speak off and just spent $8000 last year to posh up their backyard. The good thing here is that the cost will need to be split between me/my wife, my sister-in-law/her husband, and my in-laws. But this will still be a huge financial hit in late July or August.

The one car that we are keeping around suddenly developed engine trouble 3 weeks ago. And the fix required a massive tune up at the auto-mechanic's place. Cost ran up to be around $1200, which will need to be paid by August. I hate cars, but I also really need to learn how to fix them! :(

DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Re: DebtSlaveNoMore's Journal

Post by DebtSlaveNoMore »

Another month has rolled by, here are our numbers for July:

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Monthly Savings Rate: 68.9%

YTD Savings Rate: 57.5%

Months Living Expenses: 114



Major happenings:

Lots of things came to a head at the end of July.

1. My wife has entirely exhausted her savings. She has a negative balance in her checking account and 500 dollars in credit card debt due that she can't pay until her next paycheck. What is troubling to me is that when we split our finances 4 months ago, I left her with over $5,000 in her checking account. And she had $1600 a month in spending money from her day job for the last 4 months. So basically, DW spent over $11,000 in 4 months on luxury products and redundant baby supplies. :cry:

So DW was panicking again and ultimately, I had to re-gain direct control of her finances. She gave me her credit card, debit card, and check book. And we are going back to the cash-in-envelope system. She agreed to be content with $1200 a month to spend for non-essentials as long as I make her debt problems go away. I feel like this cash-only approach causes a lot of friction between us, but it seems to be the only way to save my wife from herself. :|


2. Strange things are afoot at my day job. The VP of the company basically offered me a role that would lead to a promotion to tech executive position. If I can handle this challenge, then my day job's income would top 200K. Given this opportunity, I'm disturbed and excited. Effectively, I'm being groomed for the leadership role of an organization that I loathe and entirely do not believe in. Otoh, the challenge is exciting and I could always use more money. So I'm going to make the best of this situation and go for gold! :shock:

3. Our living space situation has become intolerable. My son is over 2 years old now and incredibly naughty. Every time we turn our backs, our little man is busy trashing the apartment or peeing over my stuff. 700 square feet is just not enough for 3 people to live in, especially since one is so energetic!!!! So we've decided to buy a house. This will increase commute and saddle us with a small mortgage, but I will do my absolute best to minimize debt and commuting time by picking the right house.

WorkingWageWealth
Posts: 51
Joined: Sun Aug 18, 2013 5:47 pm

Re: DebtSlaveNoMore's Journal

Post by WorkingWageWealth »

I really enjoy reading your journal; seeing how you used it to chronicle your challenges and successes was one of the contributing factors to me registering for the site. Your journal is like a mini ERE drama and I am always checking in for updates about weightloss, your wife's conumerism, the day job, etc. Thank you for the motivation. I look forward to new entries.

DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Re: DebtSlaveNoMore's Journal

Post by DebtSlaveNoMore »

Thanks WorkingWageWealth, I'm glad that this journey is motivating others! I checked out your Journal as well. Best of luck on your debt pay down! :)

DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Re: DebtSlaveNoMore's Journal

Post by DebtSlaveNoMore »

Been a little tardy with the updates, too many things are happening in my life at the moment but here is the 1000 ft view of what transpired in August:

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Monthly Savings Rate: 38.9%

YTD Savings Rate: 55.2%

Months Living Expenses: 68


Difficulties....
August was a painful month in terms of pretty much everything. I had to pay property taxes on my rental property. My wife has fully switched back onto the cash-only system, but most of her pay checks for august had to be spent paying off the credit card debt that she built up in the previous 4 months where she had full control of her own finances. This arrangement is hardly ideal but thankfully DW is much more accepting of the cash-system now since this is the 2nd time where I had to step in to prevent a total collapse of her finances. The complexity is that there are several thousand dollars of credit card debit that had accrued on 2 credit cards. DW created a 2nd credit line without talking to me about it. In August, we paid off 1 of those cards and promptly cancelled it. There is one more card to pay off in September.

More Difficulties....
August was a rough month for me at the day job. I'm painfully transitioning into this executive position. It entails kissing the bottoms of multiple(not-so-friendly) clients whose money keep the entire account employed. I also seem to get the hardest technical problems to solve, which would normally be fun, except I'm too busy with the clients. So I'm working like a slave, I've been working nights, and every weekend and it sux (_|_)!!! It's so miserable that I had this wonderful, joyous dream about the days of my youth when I worked as a manual laborer on a farm. I woke up and became incredibly depressed that I'm living this life now rather than the the life I had as a teenager. At least back then, I had fresh air and some actual friends at work. :(

Anyways, I've ranted enough. I simply need to buck up and focus on the tasks at hand and do my best to succeed.

DebtSlaveNoMore
Posts: 57
Joined: Sat Feb 02, 2013 7:27 pm

Re: DebtSlaveNoMore's Journal

Post by DebtSlaveNoMore »

September has brought on a whirlwind of change in our household, first the numbers:

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Monthly Savings Rate: 49.1%

YTD Savings Rate: 54.5%

Months Living Expenses: 78



Everything happened at once....

In mid September, the tenant of the rental property(in Pennsylvania) abruptly called up and said he was moving out, he gave me a 3 day notice and left the rental house in a terrible condition. He still owes me over a thousand dollars in back rent which he has not paid. I would be very upset by all of this, but the man did pay off half of my mortgage over the years, so net-net it's still a huge gain for me.

At the same time, DW was getting majorly stressed out by all the changes in the public school system where she was working. NYC's public school system is rolling out the "common-core" standards, and the unionized teachers are getting laid off in droves. She did not want to work full time there since the environment is demotivating as hell and she wanted more time with our son. After talking it over, we realized that it actually makes a lot of sense for us to re-locate our family to that rental house in Pennsylvania and have my wife find a part time job there.

Now the final hurdle was my day job. That job is stressing the living hell out of me and as I scheduled a meeting with my boss to talk about the move, I was pretty sure that he was just going to hand me a pink slip there on the spot. Apparently that did not happen. I was able to negotiate a semi work-from-home scheme, where I can telecommute 3 days out of the week, and come into the office the other 2 days. The benefit here is that I get to keep my NYC salary while relocating to semi-rural PA.

With the job secured, the move to PA is now underway. Because I own that rental property free and clear, moving there will eliminate rent and parking ($1700) as a monthly expenditure. Furthermore, because my parents are 5 miles away from the rental property and the local daycare is dirt cheap, we'll be able to shave another $1000 a month in child care costs. Car insurance is less than 1/2 of what it costs in NYC. Food, utilities, and water are all much cheaper as well AND I will have a 300 square feet garden space in the rental house's backyard. So all things considered, we should be able to shave our monthly expenses in half due to this move.

Now for the difficulties
The house needs some serious TLC. The tenant family has 4 kids and they totally trashed the house. The entire house needs to be painted. Most of the carpeting will need to be replaced. Many of the closet doors are broken, and the 2 bathrooms will need to be re-tiled and re-caulked. The entire interior of the house will need contractor work to make it move-in ready.

The backyard was utterly overgrown with thorny bushes, and the fence was in a state of dis-repair. So for the last couple of weekends, I've been driving down to PA to do some of the repairs myself to save money. My father and I cleared out the backyard vegetation, tore down the old fence, and put up a new wooden fence. Then last weekend, I stained the backyard fence and did some concrete work on the house's front and back entrances.

So I've been working ridiculous hours every week, 60 hours a week on the day job, 5 hours a week on my side business, another 10-15 hours a week fixing up the PA house. Still, things are looking up and I'll keep on trucking!!! :D

sshawnn
Posts: 458
Joined: Tue Mar 08, 2011 8:17 pm

Re: DebtSlaveNoMore's Journal

Post by sshawnn »

WOW

I suppose I had missed the finer parts of your journal. Everything has definitely happened at once. You applied a huge crowbar to your situation! After those drastic changes simmer down you are going to be in a great place. I hope your wife is as happy as you are about all this. (I would like to here more about how you guys find a common ground as my wife (and children) do keep me from pulling out the crowbar.) Having your parent's help is huge and I hope she has a good relationship with them.

80 hours weeks devoted to "work" do not bode well for one's health concerning diet, exercise or promotion of mental health. I know this from experience. In part because of my years of working to much, I hold on to negative habits and I still struggle with consistently making the right thing health choices for myself even after ditching my own 80 hour per week problem. I saw your last post did not mention health and wonder if you struggle with the same consistency.

You have a great journal start. You will look back fondly at your progress as your journey continues!

Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Re: DebtSlaveNoMore's Journal

Post by Dragline »

Yes, I would say DOUBLE-WOW -- you have really taken a bull by the horns here and wrestled it to the ground.

You wrote:

"In mid September, the tenant of the rental property (in Pennsylvania) abruptly called up and said he was moving out, he gave me a 3 day notice and left the rental house in a terrible condition. He still owes me over a thousand dollars in back rent which he has not paid. I would be very upset by all of this, but the man did pay off half of my mortgage over the years, so net-net it's still a huge gain for me."

The is an excellent and inspirational example of what we have talked about in other threads about expressing gratitude and finding silver linings in clouds. You really turned a potential disaster into a great opportunity to improve your situation.

WorkingWageWealth
Posts: 51
Joined: Sun Aug 18, 2013 5:47 pm

Re: DebtSlaveNoMore's Journal

Post by WorkingWageWealth »

Will you also be able to save money on taxes? One of the things I forgot about in my move from a city back to a more rural environment was the lack of city taxes. Will you still have to pay NYC taxes because you work there or will they no longer apply because you don't live there?

In any instance, CONGRATULATIONS, you continue to inspire me.

RealPerson
Posts: 875
Joined: Thu Nov 22, 2012 4:33 pm

Re: DebtSlaveNoMore's Journal

Post by RealPerson »

What an amazing and inspiring story. You did wrestle a bull to the ground. Your story goes so fast it almost reads like a thriller.

One suggestion I might make is the spending habits of DW. It seems that they are very dfficult to control. This in turn leads almost to a parent-child relationship, with you taking full control of your DW finances. Clearly, your wife is using big spending as a way to cope with some psychological issue. It may be helpful to her and to your relationship to seek some counseling to help her work through this. It sounds like her parents may be struggling with a similar problem, since you mentioned the cost of the roof replacement issue.

Still an inspirational story. Congratulations.

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